ESRS E4 Biodiversity and ecosystems
Objective
1. |
The objective of this Standard is to specify Disclosure Requirements which will enable users of the sustainability statement to understand:
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2. |
This Standard sets out Disclosure Requirements related to the undertaking’s relationship to terrestrial, freshwater and marine habitats, ecosystems and populations of related fauna and flora species, including diversity within species, between species and of ecosystems and their interrelation with indigenous peoples and other affected communities. |
3. |
The terms “ biodiversity ” and “ biological diversity ” refer to the variability among living organisms from all sources including, inter alia, terrestrial, freshwater , marine and other aquatic ecosystems and the ecological complexes of which they are part. |
Interaction with other ESRS
4. |
‘ Biodiversity and ecosystems ’ are closely connected to other environmental matters. The main direct drivers of biodiversity and ecosystems change are climate change, pollution , land-use change, freshwater -use change and sea-use change, direct exploitation of organisms and invasive alien species. These drivers are covered in this standard, except for climate change (covered by ESRS E1) and pollution (covered by ESRS E2). |
5. |
To obtain a comprehensive understanding of material impacts and dependencies on biodiversity and ecosystems , the Disclosure Requirements of other environmental ESRS should be read and interpreted in conjunction with the specific disclosure requirements of this Standard. The relevant disclosure requirements covered in other environmental ESRS are:
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6. |
The undertaking’s impacts on biodiversity and ecosystems affect people and communities. When reporting on material negative impacts on affected communities from biodiversity and ecosystem change under ESRS E4, the undertaking shall consider the requirements of ESRS S3 Affected communities. |
7. |
This Standard should be read in conjunction with ESRS 1 General requirements and ESRS 2 General disclosures. |
Disclosure Requirements
ESRS 2 General disclosures
8. |
The requirements of this section shall be read in conjunction with the disclosures required by ESRS 2 Chapter 2 Governance, Chapter 3 Strategy and Chapter 4 Impact, risk and opportunity management. |
9. |
The resulting disclosures shall be presented alongside the disclosures required by ESRS 2, except for ESRS 2 SBM-3, for which the undertaking has an option to present the disclosures alongside the topical disclosures. |
10. |
In addition to the requirements in ESRS 2, this Standard also includes the topic specific Disclosure Requirement E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model. |
Strategy
Disclosure Requirement E4-1 – Transition plan and consideration of biodiversity and ecosystems in strategy and business model
11. |
The undertaking shall disclose how its biodiversity and ecosystem impacts, dependencies, risks and opportunities originate from and trigger adaptation of its strategy and business model. |
12. |
The objective of this Disclosure Requirement is to enable an understanding of the resilience of the undertaking’s strategy and business model in relation to biodiversity and ecosystems , and of the compatibility of the undertaking’s strategy and business model with regard to relevant local, national and global public policy targets related to biodiversity and ecosystems. |
13. |
The undertaking shall describe the resilience of its strategy and business model in relation to biodiversity and ecosystems . The description shall include:
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14. |
If information specified in this disclosure requirement is disclosed by the undertaking as part of the information required under ESRS 2 SBM-3, the undertaking may refer to the information it has disclosed under ESRS 2 SBM-3. |
15. |
The undertaking may disclose its transition plan to improve and, ultimately, achieve alignment of its business model and strategy with the vision of the Kunming-Montreal Global Biodiversity Framework and its relevant goals and targets, the EU Biodiversity Strategy for 2030, and with respecting planetary boundaries related to biosphere integrity and land-system change . |
Disclosure Requirement SBM 3 – Material impacts, risks and opportunities and their interaction with strategy and business model
16. |
The undertaking shall disclose:
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Impact, risk and opportunity management
Disclosure Requirement related to ESRS 2 IRO-1 Description of processes to identify and assess material biodiversity and ecosystem-related impacts, risks, dependencies and opportunities
17. |
The undertaking shall describe its process to identify material impacts, risks, dependencies and opportunities. The description of the process shall include whether and how the undertaking:
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18. |
The undertaking may disclose whether and how it has used biodiversity and ecosystems scenario analysis to inform the identification and assessment of material risks and opportunities over short-, medium- and long-term time horizons. If the undertaking has used such scenario analysis, it may disclose the following information:
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19. |
The undertaking shall specifically disclose:
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Disclosure Requirement E4-2 – Policies related to biodiversity and ecosystems
20. |
The undertaking shall describe its adopted policies to manage its material impacts, risks, dependencies, and opportunities related to biodiversity and ecosystems. |
21. |
The objective of this Disclosure Requirement is to enable an understanding of the extent to which the undertaking has policies that address the identification, assessment, management and/or remediation of its material biodiversity and ecosystem – related impacts , dependencies , risks and opportunities . |
22. |
The disclosure required by paragraph 20 shall contain the information on the policies the undertaking has in place to manage its material impacts, risks, dependencies and opportunities related to biodiversity and ecosystems in accordance with ESRS 2 MDR-P Policies adopted to manage material sustainability matters). |
23. |
In addition to the provisions of ESRS 2 MDR-P the undertaking shall describe whether and how its biodiversity and ecosystems -related policies :
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24. |
The undertaking shall specifically disclose whether it has adopted:
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Disclosure Requirement E4-3 – Actions and resources related to biodiversity and ecosystems
25. |
The undertaking shall disclose its biodiversity and ecosystems-related actions and the resources allocated to their implementation. |
26. |
The objective of this Disclosure Requirement is to enable an understanding of the key actions taken and planned that significantly contribute to the achievement of biodiversity and ecosystems -related policy objectives and targets . |
27. |
The description of key actions and resources shall follow the mandatory content defined in ESRS 2 MDR-A Actions and resources in relation to material sustainability matters. |
28. |
In addition, the undertaking :
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Metrics and targets
Disclosure Requirement E4-4 – Targets related to biodiversity and ecosystems
29. |
The undertaking shall disclose the biodiversity and ecosystem-related targets it has set. |
30. |
The objective of this Disclosure Requirement is to allow an understanding of the targets the undertaking has adopted to support its biodiversity and ecosystems policies and address its material related impacts , dependencies , risks and opportunities . |
31. |
The description of the targets shall follow the mandatory content defined in ESRS 2 MDR-T Tracking effectiveness of policies and actions through targets. |
32. |
The disclosure required by paragraph 29 shall include the following information:
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Disclosure Requirement E4-5 – Impact metrics related to biodiversity and ecosystems change
33. |
The undertaking shall report metrics related to its material impacts on biodiversity and ecosystems. |
34. |
The objective of this Disclosure Requirement is to enable an understanding of the performance of the undertaking against impacts identified as material in the materiality assessment on biodiversity and ecosystems change. |
35. |
If the undertaking identified sites located in or near biodiversity-sensitive areas that it is negatively affecting (see paragraph 19(a)), the undertaking shall disclose the number and area (in hectares) of sites owned, leased or managed in or near these protected areas or key biodiversity areas. |
36. |
If the undertaking has identified material impacts with regards to land-use change, or impacts on the extent and condition of ecosystems , it may also disclose their land-use based on a Life Cycle Assessment. |
37. |
For datapoints specified in paragraphs 38 to 41, the undertaking shall consider its own operations. |
38. |
If the undertaking has concluded that it directly contributes to the impact drivers of land-use change , freshwater -use change and/or sea-use change, it shall report relevant metrics. The undertaking may disclose metrics that measure:
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39. |
If the undertaking concluded that it directly contributes to the accidental or voluntary introduction of invasive alien species, the undertaking may disclose the metrics it uses to manage pathways of introduction and spread of invasive alien species and the risks posed by invasive alien species. |
40. |
If the undertaking identified material impacts related to the state of species, the undertaking may report metrics it considers relevant. The undertaking may:
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41. |
If the undertaking identified material impacts related to ecosystems, it may disclose:
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Disclosure Requirement E4-6 – Anticipated financial effects from material biodiversity and ecosystem-related risks and opportunities
42. |
The undertaking shall disclose its anticipated financial effects of material biodiversity- and ecosystem-related risks and opportunities. |
43. |
The information required by paragraph 42 is in addition to the information on current financial effects on the entity’s financial position, financial performance and cash flows for the reporting period required under ESRS 2 SBM-3 para 48 (d). |
44. |
The objective of this Disclosure Requirement is to provide an understanding of:
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45. |
The disclosure shall include:
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Appendix A – Application Requirements
This appendix is an integral part of the ESRS E4. It supports the application of the disclosure requirements set out in this standard and has the same authority as the other parts of the standard.
ESRS 2 GENERAL DISCLOSURES
Strategy
Disclosure Requirement E4-1 – Transition plan and consideration of biodiversity and ecosystems in strategy and business model
AR 1. |
If disclosing a transition plan, the undertaking may:
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AR 2. |
If disclosing a transition plan, the undertaking may, for example, refer to the following targets from the EU Biodiversity Strategy for 2030:
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AR 3. |
If disclosing a transition plan, the undertaking may also refer to the Sustainable Development Goals, in particular:
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Impact, risk and opportunity management
Disclosure requirements related to ESRS 2 IRO-1 – Description of the processes to identify and assess material biodiversity and ecosystem-related impacts, risks and opportunities
AR 4. |
The materiality assessment under ESRS E4 includes the undertaking’s:
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AR 5. |
When assessing the materiality of impacts , dependencies , risks and opportunities the undertaking shall consider the provisions in ESRS 2 IRO-1 and ESRS 1 Chapter 3 Double materiality as the basis for sustainability disclosures and describe its considerations. |
AR 6. |
The undertaking shall assess the materiality of biodiversity and ecosystems in its own operations and its upstream and downstream value chain , and may conduct its materiality assessment in line with the first three phases of the LEAP approach: Locate (paragraph AR 7), Evaluate (paragraph AR 8) and Assess (paragraph AR 9). |
AR 7. |
Phase 1 relates to the localisation of relevant sites regarding its interface with biodiversity and ecosystems . To identify these relevant sites the undertaking may:
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AR 8. |
In Phase 2, to evaluate its actual or potential impacts and dependencies on biodiversity and ecosystems for relevant sites , the undertaking may:
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AR 9. |
In Phase 3, to assesses its material risks and opportunities based on the results of Phases 1 and 2, the undertaking may consider the following categories:
Presentation of information: |
AR 10. |
The undertaking may consider the tables below to facilitate its materiality assessment of material sites identified under paragraph AR 7:
With regard to AR 7(e), the undertaking may consider using the table below:
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Disclosure Requirement E4-2 – Policies related to biodiversity and ecosystems
AR 11. |
The policies described under this Disclosure Requirement may be integrated in broader environmental or sustainability policies covering different subtopics. |
AR 12. |
The undertaking may also provide information on how the policy refers to the production, sourcing or consumption of raw materials, and in particular how it:
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AR 13. |
The undertaking may disclose connections and alignment with other global goals and agreements such as the SDGs 2, 6, 14 and 15 or any other well established global convention related to biodiversity and ecosystems. |
AR 14. |
When disclosing policies related to social consequences of biodiversity and ecosystems related dependencies and impacts under 23 (f), the undertaking may notably refer to the Nagoya Protocol and the Convention for Biological Diversity (CBD). |
AR 15. |
When disclosing information about whether and how its policies address the social consequences of biodiversity and ecosystems-related impacts under paragraph 23(f), the undertaking may provide information in relation to:
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AR 16. |
The undertaking may also explain how its policy enables it to:
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AR 17. |
When disclosing its policies , if referring to third-party standards of conduct, the undertaking may disclose whether the standard used:
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Disclosure Requirement E4-3 – Actions and resources related to biodiversity and ecosystems
AR 18. |
The undertaking may relate significant monetary amounts of CapEx and OpEx required to implement the actions taken or planned to:
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AR 19. |
The undertaking may disclose whether it considers an “avoidance” action plan, which prevents damaging actions before they take place. Avoidance often involves a decision to deviate from the business-as-usual project development path. An example of avoidance is altering the biodiversity and ecosystem footprint of a project to avoid destruction of natural habitat on the site and/or establishing set-asides where priority biodiversity values are present and will be conserved. At a minimum, avoidance should be considered where there are biodiversity and ecosystem-related values that are in one of the following categories: particularly vulnerable and irreplaceable, of particular concern to stakeholders , or where a cautious approach is warranted due to uncertainty about impact assessment or about the efficacy of management measures. The three main types of avoidance are defined below:
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AR 20. |
With regard to key actions , the undertaking may disclose:
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AR 21. |
In the context of this Disclosure Requirement, “local and indigenous knowledge” refer to the understandings, skills and philosophies developed by societies with long histories of interaction with their natural surroundings. For rural and indigenous peoples , local knowledge informs decision-making about fundamental aspects of day-to-day life. |
Metrics and targets
Disclosure Requirement E4-4 – Targets related to biodiversity and ecosystems
AR 22. |
The undertaking may specify whether the target addresses shortcomings related to the Substantial Contribution criteria for Biodiversity as defined in the delegated acts adopted pursuant to Article 15(2) of Regulation (EU) 2020/852. Where the Do No Significant Harm (DNSH) criteria for Biodiversity as defined in delegated acts adopted pursuant to Article 10(3), Article 11(3), Article 12(2), Article 13(2), and Article 14(2) of Regulation (EU) 2020/852 are not met, the undertaking may specify whether the target addresses shortcomings related those DNSH critera. |
AR 23. |
When disclosing information required under paragraph 29 for the purpose of setting targets the undertaking shall consider the need for an informed and willing consent of local and indigenous peoples , the need for appropriate consultations and the need to respect the decisions of these communities. |
AR 24. |
The targets related to material impacts may be presented in a table as illustrated below:
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AR 25. |
The targets related to the potentially material sustainability matters listed in paragraph AR 4 of this Standard, may be presented in a table as illustrated below:
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AR 26. |
Measurable targets related to biodiversity and ecosystems may be expressed as:
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Disclosure Requirement E4-5 – Impact metrics related to biodiversity and ecosystems change
AR 27. |
When preparing the information required under this Disclosure Requirement, the undertaking shall consider and may describe:
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AR 28. |
The undertaking shall disclose metrics that are verifiable and that are technically and scientifically robust considering the appropriate time scales geographies, and may disclose how its selected metrics correspond to those criteria. To ensure that the metric is relevant there should be a clear relationship between the indicator and the purpose of the measurement. Uncertainties should be reduced as far as possible. Data or mechanisms used should be supported by well-established organisations and updated over time. Robust modelled data and expert judgment can be used where data gaps exist. The methodology shall be sufficiently detailed to allow for meaningful comparison of impacts and mitigation activities over time. Information gathering processes and definitions must be systematically applied. This enables a meaningful review of the undertaking’s performance over time and helps internal and peer comparison. |
AR 29. |
If a metric corresponds to a target, the baseline for both shall be aligned. The biodiversity baseline is an essential component of the larger biodiversity and ecosystems management process. The baseline is necessary to inform impact assessment and management planning, as well as monitoring and adaptive management. |
AR 30. |
Methodologies available to collect data and measure the undertakings’ impacts on biodiversity and ecosystems may be separated into three categories as follows:
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AR 31. |
With regard to life cycle assessment for land-use, the undertaking may refer to the “Land-use related environmental indicators for Life Cycle Assessment” by the Joint Research Center. |
AR 32. |
With regard to the introduction of invasive alien species, the undertaking may disclose the pathways and number of invasive alien species and the extent of surface covered by invasive alien species. |
AR 33. |
With regard to metrics on the extent and condition of ecosystems , useful guidance can be found in the work of the United Nations System of Environmental Economic Accounting Ecosystem Accounting (UN SEEA EA). |
AR 34. |
The undertaking may disclose in units of area (e.g., m2 or ha) on land-use using guidance provided by the Eco-Management and Audit Scheme (EMAS) (89):
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AR 35. |
The undertaking may disclose, for example, land cover change, which is the physical representation of the drivers “habitat modification” and “industrial and domestic activities”, i.e., the man-made or natural change of the physical properties of the earth’s surface at a specific location. |
AR 36. |
Land cover is a typical variable that can be assessed with earth observation data. |
AR 37. |
When reporting on material impacts related to the ecosystems , the undertaking may, in addition to the extent and condition of ecosystems, also consider the functioning of ecosystems by using:
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AR 38. |
At the ecosystem level, data layers reflecting change in the extent and condition of ecosystems may be applied, including levels of habitat fragmentation and connectivity. |
Disclosure Requirement E4-6 – Anticipated financial effects from material biodiversity and ecosystem-related risks and opportunities
AR 39. |
The undertaking may include an assessment of its related products and services at risk over the short-, medium- and long-term, explaining how these are defined, how financial amounts are estimated, and which critical assumptions are made. |
AR 40. |
The quantification of the anticipated financial effects in monetary terms under paragraph 45(a) may be a single amount or a range. |